Accounting and auditing

The EBA has a strong interest in promoting sound and high quality accounting and disclosure standards for the banking and financial industry, as well as transparent and comparable financial statements that strengthen market discipline. The EBA also advocates for sound audit practices that contribute to high quality corporate reporting and to useful and understandable auditor reporting. The developments in the area of international accounting and auditing standard setting are, therefore, closely monitored. When the international standard setters for accounting and auditing deal with an issue that is of relevance for financial institutions or banking supervisors, the EBA contributes to the process by submitting its views, mostly in the form of comment letters, on publicly consulted draft standards or by engaging in direct exchanges. The EBA's comment letters are published on our website to ensure adequate transparency of the process. While the EBA does not have responsibility for developing, interpreting or enforcing accounting or auditing standards, it can develop supervisory guidance to achieve greater consistency and convergence of practices.

Technical Standards, Guidelines & Recommendations

These draft Guidelines on credit institutions’ credit risk management practices and accounting for expected credit losses follow the publication of Guidance by the Basel Committee in December 2015 on the same matter. These Guidelines aim at ensuring sound credit risk management practices associated with the implementation and on-going application of the accounting for expected credit losses.

Effective communication between the competent authorities and auditors should contribute to fostering financial stability and safety and soundness of the banking system by facilitating the task of supervision of credit institutions. These Guidelines include an underlying general framework that should underpin effective communication between the competent authorities and the auditors at all times and specify the main elements of effective communication.

Opinions, Reports and other Publications

Reports

The European Banking Authority (EBA) published today a Report including some qualitative and quantitative observations of its first impact assessment of IFRS 9. This exercise, which helped the EBA... Read more

The European Banking Authority (EBA) published today a report analysing the impact that the revised IAS 19 Employee Benefits in conjunction with the deduction of net pension assets under the... Read more

Article 519 of Regulation (EU) No 575/2013 (Capital Requirements Regulation - CRR) gives a mandate to the EBA to prepare a report on whether the revised IAS 19 Employee Benefits in conjunction with the deduction of net pension assets as set out in Article 36(1)(e) and changes in net pension liabilities lead to undue volatility of institutions' own funds. Read more »

Article 35 of Regulation 575/2013 (Capital Requirements Regulation - CRR) states that institutions shall not make adjustments to remove from their own funds unrealised gains or losses on their assets or liabilities measured at fair value. In this context, Article 80(4) of the CRR requires the EBA to provide technical advice to the Commission on possible treatments of unrealised gains measured at fair value other than including them in Common Equity Tier 1 without adjustment. Read more »

The Committee of European Banking Supervisors (CEBS) today publishes a report on the materiality of custodian banks' engagement in settlement internalisation and Central Counterparty-like activities. This forms part of its follow-up work in response to the ECOFIN's request on 3 June 2008 for a review of ‘the coverage of risks borne by custodians (…) so as to ensure a level playing field while avoiding inconsistencies in the treatment of custodians and double regulation'. ... Read More

13/05/2013

Opinions

The European Banking Authority (EBA) published today its technical advice to the European Commission on the use of a prudential filter for gains and losses arising from banks’ own credit risk of... Read more

The European Banking Authority (EBA) published today its technical advice on possible treatments of unrealised gains measured at fair value. The advice provides specific recommendations that will... Read more